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Improvement of Logistics and Supply Chain Management in the Cement

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Proceedings of the World Congress on Engineering 2014 Vol II,
WCE 2014, July 2 - 4, 2014, London, U.K.
Improvement of Logistics and Supply Chain
Management in the Cement Industry in Nigeria
Abimbola O Aniki, Charles Mbohwa, Member, IAENG, and Esther T. Akinlabi, Member, IAENG
 supply chain expertise also contributes immensely to the
Abstract— Worldwide, Logistics and Supply Chain play
important roles and also contribute immensely to the economy
of a nation. In this paper, research was conducted to
investigate how logistics and supply chains are implemented in
cement factories in Nigeria, identify the problem areas and
proffer solutions. The study was conducted by administering
well-structured questionnaires. According to the investigation,
it was confirmed that most of the investigated companies based
their logistical system only on road-link transport system for
delivering products to their customers or end-users.
Furthermore, the survey revealed that 73% of the respondents
prefer to continue with the road-link logistics system. Though
there is railway infrastructure in the country but due to
research finding, the rail system is obsolete due to negligence
and poor maintenance on this logistics system. A new railway
infrastructure will have to be put in place for effective and
efficient operation; and this is going to be costly for individual
company to bear.
Keywords - Logistics Management, Supply Chain Management,
Transportation.
I. INTRODUCTION
G lobally, logistics and supply chain have emerged as
momentous growth factors in most nations; these
contribute to the economy of a nation. Meanwhile,
many researchers give different definitions to logistics and
supply chain, according to their own findings. The bulk of
the supply-chain management research emanates from the
logistics and operation discipline, while some of it comes
from information systems and technology, and marketing.
Logistics is defined as the art and science of management,
engineering and technical activities concerned with the
requirement, design, supplying and maintaining resources to
support the objectives, plans and operations [1]. Supply
chain serves as a link between suppliers and end-users, but
the main goal of any supply chain is to deliver the right
product, at the right time to the appropriate location.
Logistics and supply chain services; the rate of
technological innovation and fluctuation in consumer
demand are among the factors that have increased the
dynamism of the competitive environment to which
organizations must respond. The shortage of logistics and
Mr Abimbola O. Aniki is a Lecturer at the Department of Mechanical
Engineering, Vaal University of Technology, P.M.B X021,
Vanderbijlpark.1900, South Africa. Phone: +27 16-950-9158; email
abimbolaa@vut ac.za
Prof C. Mbohwa is a Professor in the Department of Quality and
Operations Management, University of Johannesburg, Bunting Road,
Johannesburg, South Africa, 2006, e-mail: cmbohwa@uj.ac.za.
Dr E. T. Akinlabi is a Senior Lecturer in the Department of Mechanical
Engineering Science, University of Johannesburg, Auckland Park
Kingsway Campus, Johannesburg, etakinlabi@uj.ac.za.
ISBN: 978-988-19253-5-0
ISSN: 2078-0958 (Print); ISSN: 2078-0966 (Online)
growth of logistics in such an area as information system
support capabilities [1]–[2]. The lack of logistical expertise
has reduced the organization’s capacity to conduct their
desired processes effectively.
Furthermore, the inadequate logistical infrastructure,
combined with unskilled can be blamed for the great loss
and damage of goods experienced, especially for perishable
products. The challenges however, also generate
opportunities for companies with advanced logistical
systems and skilled employees, efficient and effective
management to grow their market [2]-[4].
Surveying the existing interrelationship between
logistics and supply chain management divisions of an
organization can help tremendously and contribute a
positive input when facing the problem arising in logistics
and supply chain in such an organization. This research was
conducted, in order to investigate, inquire, and to open up
through the survey questionnaire; why other logistical
systems have not been actively used in the cement industry
in Nigeria. It is expected that the resultant findings of the
study are going to be used to address the problem.
II. SUPPLY CHAIN AND LOGISTICS MANAGEMENT
The definitions of supply chain have been widely described
and discussed by, amongst others, Christopher [5], Ballou
[6], Elram [7], Simchi-levi et al. [8], and The Council of
Supply Chain Management Professional (CSCMP) [9].
Information sharing is a key to the effectiveness of supply
chain management [10]. However, they all expressed the
importance of integration, cooperation and information
sharing between organizations in the supply chain network.
Ways to achieve a successful supply chain management
could be the following [11]:
1. To manage the resources of supply strategically in
order to reduce the total cost of owning materials
and services.
2. To pay attention to market signals and align demand
planning accordingly, across the supply chain,
ensuring consistent forecasts and optimal resource
allocation.
3. Customize the logistics network to the service
requirements and profitability of customer
segments.
4. Segment the customers, based on the service needs
of district groups, and adapt the supply chain to
serve these segments profitability.
5. Develop a supply chain-wide technology strategy
that supports multiple levels of decision making,
WCE 2014
Proceedings of the World Congress on Engineering 2014 Vol II,
WCE 2014, July 2 - 4, 2014, London, U.K.
and gives a clear view of the flow of products,
services and information.
6. Adopt channel-spanning performance measures to
gauge the collective success in reaching the end-
user effectively and efficiently.
Fig. 1 illustrates the outline of logistics and the supply chain
for cement production.
Fig. 1. Supply chain for cement production [12]
Transportation plays an important role in both moving
purchased goods from suppliers to the buying organization,
and moving finished goods to the customers. More so, due
to the important role that it plays in the supply chain. It is an
obvious fact that products are rarely produced and
consumed in the same location, as such; transportation is a
significant component of the costs that most supply chains
incur [13]. Transport is typically regarded as a non-value
adding activity in the supply chain, although the challenges
make the assumption that it plays an essential role in the
supply chain; and if managed accordingly, it can allow
supply chains to work more effectively and efficiently.
Basically, there are different modes of transportation; but
this research focuses on the major transport modes used in
transporting materials to the required sites for use, namely:
road, air, water, pipeline, and rail. Road transport system is
the most realistic and very common means of transportation
in the cement industry in Nigeria. However, the road
transportation in Nigeria is characterised with a lot of delays
which results from heavy traffic, accidents and breakdowns
on the way. An efficient and effective transportation system
is needed for commerce to function in any industrialized
society. Meanwhile, the products purchased by the customer
have little value for them until they are moved to the
customer’s point of consumption [14]. Therefore, a more
efficient system is desirable in Nigeria. A summary of the
costs and the relative operating characteristics of the
different transport modes are here presented [15]
A. Road, relative costs and operating mode
Although the fixed cost is very low, since the physical
transport infrastructure, such as the motorway are in place
through public funding, the variable cost is medium in terms
of rising cost of fuel, cost of maintenance and the increasing
use of road and congestion charges. In respect of operating
characteristics, the road as a mode of transport scores
favourably on speed, availability, dependability and
frequency; but it does not fare so well on capability, due to
the limited capacity on weight and volume. Uniquely among
transport modes, it can allow direct access to consignor and
consignee sites.
ISBN: 978-988-19253-5-0
ISSN: 2078-0958 (Print); ISSN: 2078-0966 (Online)
B. Rail, relative costs and operating mode
The fixed costs of rail system are high; while the variable
cost is relatively low. The fixed costs are high, due to the
expensive equipment requirements, such as the locomotives,
wagons, tracks and facilities, such as freight terminals. On
relative operating characteristics, rail is considered good on
speed, dependability and especially the capability to move
larger quantities of freight.
C. Air, relative costs and operating mode
Fixed costs are on the lower side; but there are high variable
costs that include fuel, maintenance, security requirements
etc. The main advantages of air is speed; but it is however
limited in uplift capacity. Similarly, other modes of
transport are required to take freight to and from the
airports; thus air cannot directly link the individual
consignor and consignee.
D. Water, relative costs as well as the operating mode
The fixed costs of using water as a means of transport
system are on the medium side, this includes vessels,
handling equipment and terminals. Variable costs are low,
due to the economies of scale that can be enjoyed from
carrying large volumes of freight. This is the main
advantage of the water mode, together with its capability to
transport large volumes of freight like air; but it cannot offer
consignor-to-consignee connectivity, and vessels are
sometimes limited in terms of what ports they can use. It is
also quite a slow mode.
E. Pipeline, relative costs and operating mode
Fixed costs are high, due to rights of way, construction and
installation, but the variable cost is relatively low; and
generally, this encompasses routine maintenance and
ongoing inspection/security. On operational characteristics,
the dependability is excellent; but this mode can only be
used in very limited situations and prone to the danger of
bunkering.
There are some circumstances due to poor infrastructure that
will not allow some of the modes of transport to be realistic,
such as air, water, and pipeline. But in an advanced country,
it may be used effectively and efficiently in transporting the
material and the finished articles [13].
Moreover, the logistic and supply chain system in the
cement industry in Nigeria being investigated does not only
apply to the raw material supply alone; but there is a poor
supply of the finished product as well, to transport the
finished product from the cement factories in the Western
part of Nigeria to the Northern part. This is very difficult,
due to the poor transportation infrastructure. There is no
availability of body of water for shipping, a poor pipeline
transportation system. There is also the landing problem for
cargo planes due to the unavailability of airports in the end
users cities. The railway infrastructures are dilapidated due
to poor maintenance, as such, all focus is on road
transportation system and even the road facilities are not in
good state.
WCE 2014
Proceedings of the World Congress on Engineering 2014 Vol II,
WCE 2014, July 2 - 4, 2014, London, U.K.
III. METHODOLOGY
A descriptive research method was adopted in this
research by using a well-structured questionnaire for data
collection. It was designed to find the solution to the
existing problems in the aspect of logistics and supply chain
in the cement manufacturing industry in Nigeria.
The questionnaire consisted of four sections:
 Section 1: provided the demographic details about
the respondents.
 Section 2: addressed the organisational information
of the cement manufacturing industries.
 Section 3: is focused on questions about the
collaborative work in the cement manufacturing
industry with regard to logistics and supply chain
management.
 Section 4: addressed the effectiveness, performance
and information distribution in the logistics
environment.
The collected data was analysed using statistical analysis
software package (SPSS) and also, Microsoft Excel Ranking
function was used to compute the rank of mean scores of
responses. This was based on the percentage responses to
the 5-point Likert-type scale. The ranking enabled the
importance of individual statements, problems, parameters
and key performance indicators to be evaluated relative to
each other.
IV. RESULTS AND DISCUSSION
A response rate of 25% was achieved in this study. The
results showed that most of the respondents were highly
educated; 6.7% held a diploma, 60% held a bachelor’s
degree and 33.3% had postgraduate qualifications. The
responses from different departments were impressive, and
those who had knowledge about the logistics issue answered
the questionnaires. It was found that the respondents were
26 years and above in age. Women participated well in
answering the questionnaires. At least 73.3% were married
people, and the remaining 26.7% were single and divorced.
Permanent staff played an active role in answering the
questionnaires, 80% of them responded. Finally, 73.3%
preferred to speak or communicate in English rather than
the local languages. In this situation, 46.7% of the
respondents were Dangote cement workers while 26.7%
came from Lafarge Cement factory, Ewekoro, Ogun State.
Through the telephone conversation with a logistics
manager in Dangote cement, it was revealed that using
trucks alone as a means of logistics reduces their rate of
delivery of large quantities to their customers at long
distances, so they were seriously finding alternative ways of
getting to their customers with larger consignments within
the shortest possible time period. It was mentioned that
trucks were limited in the loads they can carry.
Most of the members of staff of companies that
responded said that their company produced cement was a
percentage of 66.7% while 26.7% produced cement and
aggregate. Most of these cement factories were situated in
the Western part of Nigeria due to proximity to the source
of raw material, so their logistics links were crucial to
transport their product to other parts of the country. Some of
ISBN: 978-988-19253-5-0
ISSN: 2078-0958 (Print); ISSN: 2078-0966 (Online)
the companies (60%) were owned by individuals and 33.3%
were multinationally owned. Dry process of cement
production took the highest percentage lead with 93.3%
because it is a fast method of production and more cost-
effective.
Customers purchased their products from depots,
factories and wholesalers. The percentage of customers who
usually buy their products directly from the factory was
53.3%, followed by depot purchases at 40%, and wholesale
plus those who had no idea where their products were
purchased at 6.7%. Respondents who preferred using road
to other means of logistics added up to 73.3%, and they
confirmed that they had no intention of changing to another
means of logistics for various reasons stated. Only 26.7% of
the respondents were willing to change to another logistics
system. Respondents emphasized that logistics and supply
chain management were extremely important in their
various organisations. Modularization quality was excellent
and many agreed that poor use of modularization led to
negative outcomes in the company.
78% of the respondents confirmed that collaborative
working arrangements in logistics influenced customers and
improved customer satisfaction, therefore being extremely
influential. They found that the level of commitment by the
workers in different departments was excellent. Finally,
about three quarters of the customers came back for the
product because of an excellent logistics system. The
respondents strongly agreed that their company had enough
partners with appropriate collaborative skills to effective
logistics and supply chain systems. In terms of knowledge
sharing and transfer within the working environment, 78%
felt this was strongly achievable. There was strong
agreement that collaboration procurement methods promote
innovation and improvement on major projects. However,
effective collaboration would bring better quality of service
and collaboration not only within the working environment,
but also to collaborate with logistics expertise for better
improvement.
It was strongly agreed that good leadership in
coordinating logistics and supply chain management and
involvement of supply chain leadership served as a key to
achieving target objectives on time. Finally, transparency
between the logistics leadership and the partners was not
often found in project execution, and 76.7% of the
respondents strongly agreed with that. The performance and
effectiveness of communication in a logistics environment
was analysed, it was found that the respondents preferred to
adopt roads logistics systems rather than any other logistics
link, judging by the results collected from the
questionnaires. This was caused by a lack of infrastructure
in other logistics systems in Nigeria. Timeous delivery using
trucks was regarded as Excellent by 90% of the respondents,
while for the railway logistics system, it was 10% because it
had not operated for some decades. Cost effectiveness in
delivery by truck was regarded as Excellent, but this is due
to the fact that the rail logistics had not been put into
operation, it was therefore rated Poor. Customer satisfaction
was rated Excellent for using road logistics because the
product got to the end user at the appropriate time.
Although, this is subjective as delays could occur as a result
of heavy traffic, accidents and breakdowns on the way.
WCE 2014
Proceedings of the World Congress on Engineering 2014 Vol II,
WCE 2014, July 2 - 4, 2014, London, U.K.
According to the questionnaire, profit-making for truck
delivery was regarded as Good by 83% of the respondents,
while for the rail, it was rated Average. On the information
sharing aspect, frequent departmental meetings enhanced
the improvement possibilities of logistics in the system.
Furthermore, based on the results, every company had a
website in which people or desired customers could view
the company products and their logistics system. Finally,
displaying of posters and pamphlets in the rural areas for
product advertisement was regarded as Excellent, and to top
it up through media advertisement was also confirmed as
Excellent. At least 90% of the customers shared information
from these areas.
V. COMPARATIVE ANALYSIS
The effective planning and management of a logistics
and supply chain infrastructure is a challenge for most
countries. However, a nation that is operating under only
one kind of logistic system is an under-developed country.
Most researchers have not deeply discussed a situation
where it is suggested to the logistics and supply chain
practitioners to implement another means of logistics
different from the existing one. Ellram and Cooper [15] in
their paper stated that the key roles of logistics are
establishing and managing the supply chain.
In the investigation conducted by the authors, it was
revealed that in Nigeria the logistics system are purely based
on road (i.e using trucks), so in this research, the authors
tried to find out why this is the case and to suggest other
means of logistics (air and rail) to the cement industry. Rail
transportation is one of the cheapest means of freight
forwarding in terms of high volume cargoes shipped over
long distances. Transportation expenses decrease by 20%
compared to road transportation [15]. But according to the
findings, the infrastructure for rail is obsolete and has been
abandoned for decades. As such, in order to revive rail
logistics system into operation, many things have to be
implemented. First, by having a sound framework for rail
transport infrastructure with ongoing vigilant monitoring
arrangements. In addition, there must be good corporate
governance arrangements that ensure openness and
transparency in the manner in which these logistics
infrastructure is planned, evaluated and delivered.
The practitioners of logistics infrastructure should
always be ready to listen to external advice in order to
enhance the quality of logistics operation and to ensure that
the logistics system does generate benefits and contribute
immensely to the economic growth of the nation. From the
comparative discussion that was presented in this section, it
is highly advisable to encourage most of the cement
companies to use other means of logistics transportation
system which are cheaper and more efficient. Maintaining
such a system like the railway transportation system will
enhance effective delivery, on time delivery and increase the
overall turnover.
VI. CONCLUSIONS
Cement is a binder, a substance that sets and hardens
independently, and it can also bind other materials together.
It is a combination of different materials such as red
alluvium, shale, limestone and gypsum in some cases, to
ISBN: 978-988-19253-5-0
ISSN: 2078-0958 (Print); ISSN: 2078-0966 (Online)
produce cement. It is used in the construction of roads,
bridges and also in building houses and towers. The
effectiveness of the logistics system in the cement industry
is of importance to the sustainability and execution of many
building projects. The main target of this research was to
find out why only trucks were used as the major means of
transportation in the cement industry in Nigeria and also to
use the findings of this research to minimize or eliminate the
likely hazards that may occur when using trucks alone as a
logistics system. Hazards such as, high accident rate on the
road, product wastages, and traffic congestion on the
highways are common in Nigeria. According to the survey
questionnaire sent to different cement companies in Nigeria;
it was found that 73.3% of the respondents still preferred to
use the road link logistics system. The reason was that,
though there is a railway infrastructure from one point to
another, even from the factory to some towns far and near,
the rail system logistics could not be used due to the
obsolete infrastructure of the railway. To bring this back
into operation, new infrastructures would have to be put in
place. Furthermore, there are some works to be done
concerning the logistics system which included
collaboration with the government and to have the
knowledge of how the modern rail logistics system is very
significant in the world today. The use of only trucks for
logistics in Nigeria is not only applicable to the cement
factory alone but to other factories and companies like the
sugar companies, breweries and petroleum companies.
Proper orientation and information about the logistics and
supply chain should be given to people in order to improve
the logistics and the supply chain activities.
This research has exposed the need for modern railway
logistics and supply chain management systems in Nigeria,
and this can be done through the combined efforts of the
government, the department of transport and the companies,
in order to have a better, effective and efficient logistics
system. Focusing on only one logistics system implies that
the nation is still under-developed and not willing to
advance into the modern day of transportation systems. The
recommendation concerning this issue for Nigeria is to
establish a modern institute of logistics and supply chain
management under the administration of the department of
transport tasked with providing road maps to the effective
implementation of other means of transportation in Nigeria
and to actively involve companies for them to contribute
their quota in order to benefit everybody and at the same
time have a better relief transportation system. The authors
strongly believe that by putting this advice into practice, a
better transportation system will emerge in a positive way.
Further study can be conducted to focus on monitoring the
implementation of other types of logistics systems.
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WCE 2014
Proceedings of the World Congress on Engineering 2014 Vol II,
WCE 2014, July 2 - 4, 2014, London, U.K.

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ISSN: 2078-0958 (Print); ISSN: 2078-0966 (Online)
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